Swot analysis of 3M. The 3M Company is a conglomerate US multinational company. Hermon W. Cable, John Dwan, William A. McGonagle, Henry S Bryan, and Dr. J. Danley Budd were the founders of 3M, and they laid the foundation of the company on June 13, 1902, under the name of Minnesota Mining and Manufacturing Company. The headquarter of the company is in Maplewood, Minnesota, USA.
3M’s main products and services are optical films, healthcare software, electronic circuits, car-care products, medical products, insulating materials, electronic/electrical connecting, orthodontic products, paint protection films, window films, personal protective equipment, passive fire protection, abrasives laminates, and adhesives.
According to an estimate by Macrotrends, the annual revenue of 3M in 2022 was 34.762 billion dollars, and it has decreased by 1.6%. Out of which, the net income of the conglomerate company was 6.575 billion dollars, and it has increased by 9.82%. However, the company has employed more than 95,000 employees to manage its worldwide operations.
3M’s top competitors are Nikon Kohden, Avery Dennison, Johnson Electric, Panasonic, Tyco, Carlisle, Danaher, Corning, Johnson & Johnson, Honeywell International, Pfizer, Emerson Electric, and General Electric.
Today, we’ll discuss the swot analysis of 3M. It’s going to focus on the internal and external factors impacting the world’s leading conglomerate organization. Here’s the swot analysis of 3M as follows;
Strengths of 3M
Corporate Social Responsibility
3M is a socially and environmentally responsible organization. In fact, the company has adopted the pollution prevention project back in 1975 under the name of 3P (Pollution Prevention Pays). However, the brand has decreased its pollution level up to 72% in the early 2000s.
The company won the US Environmental Protection Agency’s Energy Star Award in 2012. It shows the company’s commitment to the society and environment. It’s also a great marketing logo of the company to attract the environmentally-conscious customers market.
Many retailers and distributors have brought 3M’s products and services to more than 200 countries across the world through their various distribution channels. It shows the global reach of the company’s products.
The pandemic crisis brought a lot of havoc to business and companies across the world. 3M is one of the few companies that have survived the pandemic, lockdown, and shutdown of businesses. In fact, the company’s net income and annual revenue have increased by 17.81% and 0.15%. It shows the strong financial position of the company to launch various projects.
According to an estimate, 3M is operating in business in more than 65 countries worldwide under the same brand. It shows the strong brand name and brand recognition if it’s selling its products in over 65 countries.
One of the reasons 3M has maintained its income and profitability is because of its diverse product portfolio. The company’s product portfolio comprises over 55000 products and services. It’s also important to know that the company sells its products under many brand names.
Research & Development
Research and development are one of the reasons 3M has been in the business for more than 115 years. According to an estimate, the research and development budget of the company in 2022 was 1.891 billion dollars. The company has been spending billions of dollars on R&D for the past few decades. It’s because the company knows the significance of innovation and creativity.
According to an estimate by Interbrand, the brand value of 3M in 2020 was 10505 million dollars, and it has increased by 8%. The company ranked 69th position of the Best Global Brand of 2022.
Weaknesses of 3M
Fragile Brand Image
The global brand image seems good, but it comes at a heavy price and responsibility. A small mistake or wrong decision could jeopardize your decades of hard work. The difficult part for 3M is to maintain its position in the international market.
It’s no doubt N95 masks of 3M are very effective to avoid the spread of viral diseases. As soon as the doctors and WHO prescribed the N95 masks, their supply became short in the market. The government jumped in and enforced the company to stop importing it to Canada and other countries. The shortage of masks caused a lot of panic among the public.
Minnesota State filed a lawsuit against 3M for 5 billion dollars in 2010 claiming that the company released toxic PFCs into the air and water. Even though the company maintained a claim that the chemical posed no threat to humans, but the company agreed to pay 859 million dollars in the settlement in 2018.
Opportunities available to 3M
3M should consider expanding and diversifying its business portfolio by adding more businesses since the company has a strong financial position. It would help the company to increase its market, growth, and influence in the global market.
As we know automobile industry is the world’s highly profitable industry. Its market has been growing after the pandemic and economic recession. However, 3M should enter the automotive industry and amplify its investments.
3M has bought many brands over the years. Like Meguiar’s, Softmed System, Archon Technologies, Ceradyne, MModal, Scott Safety, Acelity, and many others. They have helped to increase the company’s product portfolio and customer market share. The brand should keep acquiring businesses and companies and growing.
Threats 3M has to face
Risks outside the US
Globalization has a lot of advantages for multinational companies. But it also comes with a lot of risk factors like trade regulations, taxes, exchange rate, political conflicts, and so on. As 3M is expanding its business globally. The company should be ready to face such challenges.
Tyco International, Textron, Johnson & Johnson, Honeywell International, CONMED Corporation, Cardinal Health, Balchem Corporation, and Avery Dennison are some of the top competitors of 3M. Their increasing market share and profit growth present a severe threat to the company.
It’s no doubt 3M has taken a lot of CSR initiatives over the years and won many awards. Even then the company has to pay 859 million dollars. It shows the sensitivity and fragility of the circumstances which has become very important to the public and governments worldwide.
Conclusion: 3M Swot Analysis
After a careful study of the swot analysis of 3M, we’ve concluded that 3M is indeed the world’s leading conglomerate company. Competitors, litigation costs, shortages, and regulations are some of the main challenges. 3M should utilize its resources to expand its product and business portfolio and keep in mind the regulations while making any decisions.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.